The Online Marketplace – Why B2C is Fast Becoming the New Standard
The covid-19 pandemic has dramatically accelerated the growth of e-commerce and online retail. The trend looks like it will continue to stay, even as lockdowns and pandemic measures reduce. This is leading businesses to adopt a dramatic shift in their retail logistics operations, deploying direct B2C models for their goods and products.
What is a B2C retail logistics model?
B2C is an acronym for ‘Business to Consumer.’ This retail logistics model describes the movement of goods and products travelling, as the name suggests, directly to the consumer rather than to another business. An example of a B2C transaction would be the purchase of a laptop from a tech store. Usually, the retail outlet would require B2B transactions, (business to business), to get the product shipped to their establishment from their suppliers. However, many online retail platforms now allow consumers to receive the products directly from the supplier online. Bypassing the brick-and-mortar store.
An important distinction between a B2C and a B2B business is what value they provide. To be a success with a B2B model, it must be clear that the product or service you are providing creates value. Meanwhile, B2C relies on maintaining strong customer satisfaction and marketing tactics to draw in customers.
Examples of online B2C models.
Online B2C business models can be classified into a few broad categories.
- Customers buy goods from an online business. This includes businesses that operate solely online via a website or are the online counterpart of an existing brick and mortar store. Example: Woolworths online.
- These businesses provide an online platform to connect buyers with sellers. The site itself may not even sell products of its own, it purely provides the connectivity service. Example: eBay.
Advertising based B2C
- Most social media platforms, blogs and news sites operate under this model. They provide free web content to keep users engaged but allow other businesses to place digital ads on their websites. These advertisements are used to direct consumers to their respective sites, (usually direct sellers or online intermediaries.) The website distributing the free content profits by charging a fee for businesses when they place ads on their website. Example: YouTube.
- An online platform creates a series of online communities based on shared topics, values, or interests. The site then on sells the user data, highlighting their interest in a topic to a relevant company, which can advertise directly to them through the platform or website algorithm. Example: Facebook.
- The online businesses profit by charging a fee to their users for accessing their content. The fee could be in the form of a monthly or yearly subscription, or a one-off fee. Example: Netflix.
Why are online B2C models thriving?
So, why is B2C fast becoming the new retail logistics standard? Well, one of the most apparent reasons was covid lockdowns forcing people to purchase goods online rather than in person. However, the trend has been growing since well before then. Purchasing products online can be cheaper for customers. They don’t have to deal with the brick-and-mortar retailer that inflates the product prices to cover costs and make a profit.
E-commerce has a different set of costs integrated; storage, retail logistics, transport and 3pl warehousing. However, it is usually cheaper than renting or buying land for the store, hiring and training staff, marketing etc. This model is also very convenient for customers too. Products can be delivered directly to homes, and almost anything can be delivered from a variety of stores. Rather than travelling to five different stores to get specific items at each one; all the products can be purchased within a short timeframe with just a few clicks at the computer at home.
How do the goods get to the consumer?
Many online businesses may have no in-person store or shop front to sell their goods or products; even if their business provides tangible objects that you would usually find in retail outlets. How are they get their products to consumers? That is where retail logistics and 3pl warehousing comes in. Businesses can outsource the storage and shipping of items to a 3pl warehousing company such as Elite Logistics. They may never even have to touch the product they are selling.
By outsourcing to an established logistics company with a large warehouse, each business doesn’t have to get involved with the complicated and tricky logistics process and can share the costs with other businesses who are also utilising the services of the outsourced 3pl warehousing provider. For a fee, the logistics enterprise will transport the goods to buyers. This overall reduces the cost of business and gives e-commerce a competitive edge.
Are you looking for an established retail logistics operator for your business?
Elite Logistics Australia offers an accurate and accountable solution for all your retail logistics requirements. Our team uses cutting-edge technology and integrations to produce the most efficient and smooth warehousing operations for any B2C business.